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The worldwide PC market continued to slow in the fourth quarter of
2010 (4Q10) due to a softening consumer market, competing products
like Media Tablets, and strong year ago sales, according to the
International Data Corporation (IDC).

Despite a holiday season marked by a long promotion cycle and highly
competitive price points, the global PC market saw shipments rise
only a modest 2.7% year on year during 4Q10, IDC said. Fourth quarter
growth was slightly less than a projected increase of 5.5%, but
shipments of 92.1 million for the quarter still were the largest
ever. Total shipments for 2010 reached 346.2 million, an increase of
13.6% that was fueled by a strong recovery in the first half of the
year.

Softening demand in Asia/Pacific (excluding Japan) contributed to the
slow market with shipment growth falling into single-digits following
a recent peak of more than 30% a year ago. Other regions were
generally in line with expectations. The United States market
declined 4.8% year on year, while other regions continued to
experience market expansion, albeit at a slower pace than in recent
quarters.

"The US market was expected to shrink year over year given the
exploding growth experienced in the fourth quarter of 2009. Growth
steadily slowed throughout 2010 as weakening demand and competition
from the Apple iPad constrained PC shipments. In addition to
relatively high market penetration and a 'good-enough' computing
experience with existing PCs, consumers are being more cautious with
their purchases and competing devices have been vying for consumer
dollars. This situation is likely to persist in 2011, if not worsen,
as a wave of Media Tablets could put a dent in the traditional PC
market," said David Daoud, research director, US Quarterly PC Tracker
and Personal Computing.

"Consumer fatigue is playing an important role in many markets as the
Mini Notebook surge wanes and consumers watch their spending and
evaluate other products," said Jay Chou, research analyst, Worldwide
Quarterly PC Tracker. "Softening demand in Asia/Pacific and the
potential for similar changes in other regions represent the biggest
potential shift in PC growth during 2011. These factors are likely to
slightly reduce growth from previous projections of about 10% for
2011, although replacements in the commercial segment and aggressive
competition should still support double-digit growth in the second
half of the year."

Regional Outlook

* United States - Despite a difficult year-on-year comparison,
the fourth quarter still managed to produce the highest volume
quarter of the year. We continue to expect roughly flat growth in the
first half of 2011 before the market picks up speed again.

* Europe, Middle East, Africa (EMEA) - As expected, EMEA recorded
a soft Christmas quarter as the region remained constrained by high
inventory levels particularly in the retail channel. Consumer demand
continued to be adversely impacted by the stellar uptake of media
tablets, diverting consumers' budget away from computing. Recovery in
the commercial segment continued gradually, however the sustained
economic uncertainty and a string of new austerity measures put
pressure on IT investments.

* Japan - Enterprise renewals continued to be a driver as strong
commercial purchases of XP systems helped offset a small decline in
consumer demand.

* Asia/Pacific (excluding Japan) - Shipments increased only 7% in
4Q10, the first single digit growth quarter since 1Q09. This was in
part due to the comparison to a strong 4Q09 base, but also because of
continued notebook channel inventory challenges this quarter.

Vendor Outlook

* HP - faced a challenging quarter in the U.S. as sales of Mini
Notebook PCs and consumer purchases slowed, contributing to a
year-over-year decline of 5.3%. However, HP managed to stake out
growth in other regions and saw a global decline of roughly 1%.

* Dell - Solid numbers in emerging markets helped it to grow
slightly above market at 4.2% and regain the number 2 position in
total PC shipments. Still, Dell's shipments declined slightly
compared to 3Q10, in part due to the stalled U.S. market.

* Acer - After a strong run through 2009, the vendor was affected
by lackluster sales of Mini Notebook PCs and slowing consumer demand
across many markets.

* Lenovo - Generally grew well above market at just over 21%
growth worldwide. Its improvement in garnering commercial projects
and disciplined approach to region-specific initiatives helped it to
continue to grow in a finicky market.

* Toshiba - Shipped 12.1% more units than the same quarter last
year, as one of the few top vendors managing double-digit growth in
the U.S. and worldwide.